Wall Street Rises as Rate Cut Bets Strengthen; Housing, Airline Stocks Lag

U.S. stocks gained on Fed rate cut optimism despite downward jobs revision. Housing and airline stocks slumped, while banking and networking outperformed. Treasury yields edged up to 4.04%.

The Dow increased 196.39 points or 0.4 percent to 45,711.34, the Nasdaq climbed 80.79 points or 0.4 percent to 21,879.49 and the S&P 500 rose 17.46 points or 0.3 percent to 6,512.61.

The Labor Department is scheduled to release reports on producer price inflation and consumer price inflation. The annual rate of growth by consumer prices is expected to accelerate to 2.9 percent in August from 2.7 percent in July while the annual rate of growth by core consumer prices, which exclude food and energy prices, is expected to hold at 3.1 percent. Ahead of the data, CME Group's FedWatch Tool is currently indicating a 91.8 percent chance the Fed will lower rates by a quarter point and a slim 8.2 percent chance of a half-point rate cut.

Ahead of the data, CME Group's FedWatch Tool is currently indicating a 91.8 percent chance the Fed will lower rates by a quarter point and a slim 8.2 percent chance of a half-point rate cut. On the U.S. economic front, the Labor Department released data showing non-farm employment for the twelve months through March 2025 was downwardly revised by 911,000 jobs.

housing stocks moved sharply lower, with the Philadelphia Housing Sector Index plunging by 2.9 percent after ending Monday's trading at a nine-month closing high. Airline stocks were substantially weak, as reflected by the 2.0 percent slump by the NYSE Arca Airline Index. Steel and gold stocks moved downwards while networking and banking stocks turned in strong performances.

Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index fell by 0.4 percent while Hong Kong's Hang Seng Index jumped by 1.2 percent. The major European markets also ended the day mixed while the German DAX Index declined by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both crept up by 0.2 percent.

In the bond market, treasuries gave back ground after moving notably higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 4.04 percent.

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